Understanding the financing/loan process

Lower interest for shorter tenures is out of context here (car loan).  I intuitively mentioned it here - it pertains to a particular type of advance.  Sorry for the confusion.

Interest rates are floating/fixed & in some cases are recovered flat.  As it may not be possible for all to go in to the details & understand the interest burden, one should straightway compare the EMIs & total repayments (EMIs X repayment months).

In absence of tie-up, the dealer may not help.  You will have to approach the bank directly.  The documents primarily required by any bank are Copy of passport/voters ID/PAN card, Address proof, Statement of Bank A/C (6-12 months), IT Returns (2-3 years), Latest salary-slip showing deductions etc.

Edit: Further to para 2 above...

Do we have an option of taking a 'fixed' or 'floating' rate, when it comes to car loans? Given the current market conditions, and assuming that I want to go for a 3-year loan tenure, what is advisable to take, and why?

Also, are interests on car loans partly or 100% tax deductible?

Normally we do not have option to choose the type of interest rate – floating or fixed – it depends on how banks offer.  Ultimately, there isn’t much of a difference, as, in case of fixed rate, the bank (& the borrower) has the right to exercise the option of reset clause.  These days, banks offer a mix of both – say fixed for 1-2/3 years & floating for the remaining 3/4-7 years.

If you are a salaried person, you would not get any tax benefit. But if you are a professional/businessman - declaring income under the head profits/gains - then the interest on car loan (& depreciation) could be utilised (I’m not aware of further details).

I'd like to offer my advice for #5. Actually, the traditional way to get car financing is through the dealership, but it is a disadvantage to the buyer. I would recommend applying for a car loan online through websites such as up2drive or carfinance.com because then you can walk into the dealership as a cash buyer. These type of sites allows car buyers to apply for auto loans and then they provide you with an electronic check. My first car I bought through the traditional way by going into the dealership and getting haggled and the run around with all these added features, which bumps up your monthly significantly. My second car I bought last year, I tried one of these online car loan sites, and it made the purchasing processor less stressful. Hope this helps.

Such online facilities are available here in India also.